It varies a bit, according to what the currency-pair is. If you’re trading EUR/USD, say, then 1 lot represents $10 per pip, so you’d want to trade 1 minilot ($10,000-worth) to make each pip represent $1.
[U]Nobody with a $100 account should be trading at $1 per pip[/U].
Allowing for exposing no more than 1% of your account to risk on any individual trade (which would be a wise starting-point), that would mean risking no more than $1 of your account on any trade - and you clearly wouldn’t want to be doing trades with a 1-pip stop-loss (even if that were possible anywhere, which it isn’t)?!
With a $100 account, this would be [B][U]hugely[/U][/B] excessive position-sizing, no matter how much or little leverage you use.
$100 is too little even to trade a microlot at $0.10 per pip.
So, I’ve seen this claim made many times on many forums.
I’m working on something to combat this, as I feel it’s a falsehood.
I do believe that an under-funded FX retailer, with a decent strategy, could actually make it > 6, 9, 12 months and make money, while depositing incrementally…
It’s actually the SOLE reason behind the thread I started here…just, need to give it 3-6 more months to play out.
Yes, [I]possibly[/I]. “[U]Could[/U]”. But I also think that realistically, the odds are hugely stacked against each individual person trying to do it. I guess that out of 100 of them, only a [I][U]very[/U][/I] small handful will ever succeed, that way. (I suspect we’re probably less far apart in our positons, really, than the conversation suggests?)
I think a more experienced trader could do it. Someone who understands mm, r:r, leverage, someone who would be patient, choose pairs with care and not go chasing after the money.
Harder for a new trader, no experience, little knowledge of fx, trusting.
I’d be happy to open a $100 account and post my progress if you think it might benefit others…mind you, it would be embarrassing if I blew the account, wouldn’t it!
For sure … no question: you or I could do it. But I don’t think that’s quite the real issue, is it? We don’t need to do it. You and I are not undercapitalised, and know what we’re doing, but we’re really talking (I think?) about the potential for people [I][U]without[/U][/I] our experience?
Yes, you’re right. In fact, the majority of new traders would fail even with a much larger account. Theyd still make the same mistakes but on a larger scale.
Without losing money? Listen, loss is a very common part here as like others business. So, never try to avoid your losses completely, if you do so then you may lose more. Because, it would be very easy for you to lose your mental strength. By the way, 100$ trading capital is not standard balance to start live trading but nothing is impossible for a knowledge trader.
The theory of concentrating on avoiding losses completely leads in practice to an orientation which revolves around identifying and adopting only very high win-rate methodologies, and in practice that’s not only seriously limiting but also tends to be counter-productive to the learning process, because it makes it harder for people to understand that what really matters is [I]expectancy[/I], [U]not[/U] win-rates.
Further information here: “[I]Profitability & Systematic Trading[/I]” by Michael Harris (Wiley, 2007), an [I]excellent[/I] beginners’ book.
Losing is 90% of the game. Doesnt mean u lose 90% of the time, just means managing losses is incredibly important.
Risking 1% of the account can get you rolling thru great practice and repetitions.
Now, if Your signals are generating pips, and your losses arent wiping them out, Then U can risk more pips per trade. The bottomline is, If your trade is wrong, let it stop you out, and continue on the game plan.
Immmm sooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo bad a losing,…
Its my weakest point in my forex career. Its the link that holds me back.
Directional bais is important, then, How can you lose? Maybe a Whip saw,? *
Just remember, for every loss, You have to recoup double to get it back.
Although it is tiny amount but you can grow with such kind of investment if you have enough knowledge and vast demo trading experience. I would like to suggest you that you should use the small lot size then you can grow with 100$ investment.
Yes, very true … which makes it possible to compound more quickly than one might expect, if one doesn’t need to withdraw from the account, given the position-sizing flexibility with spot forex.
I used to aim for 3% for the day, at one time. It’s pretty difficult to maintain this for very long, though. I don’t think I’ve ever managed it for more than two consecutive days (but I’m very risk-averse and conservative).
Hi Lexys, First off, I enjoy everysingle post you write, your contribution at BP is very Insightful. ThANKS!!
Ive been trading like a manic since day one, lol,…
5% is very easy for me to get, its that one dang trade that punched me in the face.
Then add in everything im going thru with my surroundings and lifestyle, ugg, under the gun, rush rush rush, need it now… Then you realize, holy crap, if Id just stuck with the 5% a day, Id be rich TODAY!!
This career is easy, whats hard is understanding your ability, understanding long term success, using everysingle trade as a stepping stone to get better for the next session, and compound profits SYSTEMATICALLY, while focusing on Strong entries that make sense, and cutting the trade when it doesnt.
I used to use 99% of my allowable units per trade. SMH,ahhhhhhhhhh,
Now I used 24% per trade. If anything, because I now understand directional premise, scaling in works best for me. Gives me 4 shoots to get it right. If it turns ugly, just close them all down, and keep on arollin…
I freakin Love Forex, I will always trade, and It will pay off when I keep my mind right, keep looking forward, keep my trades manageable.
From this day forward, 5% account 1, and practice account 2 after I get my goal of 5% on main. WHich, really, SHOULD turn into a goldmine following the same plan.
My win rate is 98% on average, its minimizing that 1 single, stupid, prayin on a trade Bullcrap that time after time got me introuble.
If You can start with $100, concentrate on above, building a routine and keeping to it, the sky is the limit.
A pip is a pip is a pip is a pip,
Now, everyone trades different, I just love short term trading, because I cant even count how many times my trade just missed my take profit, just to hit a stop. I could have it allllllll mapped out, 45 pip move TP, and it go 44.9 pips, and fall back. Unreal some of the stuff Ive seen with my TP and SLs. So, I take what I think I can get. Unfortunately, I dont have a tight Trailstop on my App, or Id be sooooo much more profitable with my style. SO, I have to just close the trade, and more then not, it continues fast for another 10 pips AS SOON AS I TAKE PROFIT. Uggggggg, * bangs Head
There are also Pitfalls at New releases and lunch breaks, certain times of the day to stay out of the traffic.
I see this business as a either, hold long term, ( weeks) or very short term, stick and move, get in, get out, hit goals, and be gratefull you have money to trade with tomorrow. You beat the price action today, throw your hands up in joy, and close it down, enjoy life, live for today, and help at least 1 persons day go smoother.
yeah exactly, to some 100 might seem too low or to small, and in some cases yes it can be, but many traders trade with a lot less, as long as you keep the focus at maximum and the risk and minimal, then it should work gradually but surely pip by pip, i have to give credit to some traders, with out mentioning names but they do take the small accounts very seriously, journals and all and grow it from cents accounts or micro. they have my respect.
Yeah, it can get really frustrating. That’s why sometimes I close the trade manually before it reaches my TP (like 10-15 pips (I usually go for 150+ pips)) - the SL I always leave it as it is, I’ve managed to get out quite a few times for 2-3 pips.
I have been around for 5 years, worked for a few forex brokers. I can tell you from experience, it isn’t worth the effort to trade with $100. You are better of spending your time working, it provides a better return than trading. As it takes a lot of time to manually trade and make money.
Having said that, i dont know your exact situation, you might be able to survive on a few dollars a day. This is just my 2 cents. Good luck
Granted, some can chip away day after day, and not see any success. Some can hopp right in, and be successful in no time flat. There is a learning curve, and there is the Forex curve, where 96% have no idea the real reason price moves. And those that dont care, and follow methodical systems that gives you success, even tho, they have no dang knowledge of anything FOrex.
Why would you come to a Forex Forum, and say such a thing?
You know why? Because YOU still work for the brokers, and fish of the big boys throwing money around, because thats the deal for your line of work.
Yeap, 95% get duped, whether on the charts or by someone selling the magic indicator, or Mentorship programs.
With that said, DOnt listen to this Kat above, He is one of THEM.
Start with a dang Dollar, IT DONT MATTER, IF YOUR SHTTY AT TRADING< YOU’LL LOSE ANY AMOUNT…
Nah i don’t work for brokers anymore. But i have seen enough to know. The odds are hugely unfavourable for traders.
If you really want to learn and make money in Forex. Then commit to a bigger amount, because $100 is no where near enough to cover margins, which puts you in a huge disadvantage. Also only trade eur/usd do not attempt GBP pairs they rape newbies.